Should Employers Consider Investing in Outplacement

by HRHQ Editorial Team

Having to let go of an employee is rarely an ideal situation. It may be necessary—for example, when the company budget pushes you to make redundancies or if an employee’s continual low-quality performance is no longer acceptable—but that won’t make the news easier for you to deliver or for your staff member to hear.

You can, however, offer outplacement resources to help your employee prepare for starting a new career external to the company. Not only is this a practical step you can do to help the individual, but making the executive choice to provide these services can also benefit your company as a whole.

To better understand why you should consider investing in outplacement we have outlined a few positives below.

It enhances your employee reputation

Getting laid off can incite bitterness in former employees, who may feel bereft and take to employer review sites to spread the sentiment. This can tarnish your brand as an employer and turn away qualified recruits. To avoid this outcome, give your former employee tangible reassurance that you respect and care for their wellbeing. One of the best ways to do this is to provide excellent outplacement services that can grant your former employees an extensive network of career consultants who can help them define their next career options. Reputable outplacement programs can also provide access to training workshops and connections with local recruiters. Extending these resources will grant your former employees some peace of mind and elevate their perception of the company, as well as convince future employees that your company is a worthy place to work.

It fosters a smoother handover

Barring extreme cases, layoffs aren’t usually effective immediately. In some instances, it can even take months for the contractual obligation of your employee to be fulfilled. However, knowing their employment is ending can be understandably distressing for your former workers. This can distract them from any work they have at hand and may lead to some form of quiet quitting, a phenomenon in which workers only do the bare minimum. Since they will be let go anyway, some might find it justified to no longer put in any extra effort.

Giving your former employees the chance to enrol in an outplacement program can curb those tendencies. Since you’ll be giving them meaningful support, they can be more assured of attaining a job in the future and more motivated to tie up loose ends and share their knowledge with those undertaking their previous responsibilities. This way, outplacement programs can encourage an overall seamless transition.

It reduces unemployment cost

Perhaps the most common objection to outplacement services is the fact that they can cost you. However, keep in mind that not utilising it can also generate expenses in the form of unemployment benefits. The longer your former employee remains without a job, the more they’ll need to leverage those benefits, consequently increasing your unemployment insurance rates. This can be even more challenging if a conflict arises over severance pay or redundancy compensation, and your company has to spend to deal with litigations. Instead of setting yourself up to be vulnerable to these circumstances, it’s best to make use of outplacement services at the outset.

It boosts employee morale

Layoffs can also negatively impact the rest of your workforce. Some may experience survivor’s guilt or anxiety that they, too, will be let go. The result is twofold: Firstly, your employees’ quality of work will downgrade. Secondly, many will be thinking of quitting themselves. According to a 2023 article from HR Magazine, 30% of employees want to leave to find a more secure role elsewhere. An assurance of job security is paramount for your employees to work well, and layoffs can threaten that.

You can return that psychological safety to them with outplacement benefits. While the thought of being let go may still incur apprehension, seeing former coworkers taken care of via these services and understanding that they would be similarly treated in those circumstances can provide the drive and commitment to excelling in your company.

Outplacement services can mitigate many of the adverse consequences of layoffs. As an employer and leader, consider taking advantage of them.